Roger Zullo—Fraud Scheme

Posted December 20, 2016byPeiffer Wolf

Roger Zullo Allegedly Sold Expensive Variable Annuities to Health Care Workers and Retired Persons Which Brought in as Much as $1.8 Million in Commissions

Roger S. Zullo, an investment adviser with LPL Financial, allegedly sold variable annuities to medical care employees and retirees, bringing in about $1.8 million in commissions, according to a Complaint from the Massachusetts Securities Division currently under review by attorneys Jason Kane and James Booker.

Roger Zullo purportedly sold unsuitable annuity investments to at least 11 clients, generating large payouts for himself and the brokerage firm, said Complaint notes.

In 2015 Zullo allegedly took the assets of octogenarian with failing health into a so-called “deferred” annuity that would not provide her any income for a minimum of at least two years, the Complaint further alleges.

In a bizarre report, Roger S. Zullo allegedly had a woman come to see him at a subway station near his office for an investment which supposedly cost her $1,391 in surrender fees and “deprived the client of income she relied on to pay for the basic costs of living”, the Complaint also reports.

Massachusetts Secretary of State William F. Galvin further alleges that Zullo knew that the aforementioned product would not produce immediate income and that the annuity swap would give Zullo and LPL with cash up front, while leaving the client in financial ruin.

Galvin goes on to further allege that LPL did not properly execute its supervisory duties regarding Zullo.

Furthermore, Galvin alleges that Zullo then instead was rewarded by LPL by giving him prestigious entrance into the firm’s so-called “chairman’s club”.

The club was supposed to be only for top annuity producers, and Zullo was even though there were many red flags regarding his sales tactics, the Complaint reports.

LPL Supervisor Allegedly Warned LPL Brass that Zullo Routinely Had Customers Switch into New Annuities in order to Produce Commissions and Sold the Same Product Quite Often

An LPL supervisor allegedly warned LPL managers in 2014 that Zullo was selling a lot of a single product, and had a pattern of switching customers into new annuities every six or seven years to generate commissions.

Galvin and the Massachusetts Securities Division are purportedly hoping to permanently bar Zullo from the securities industry in Massachusetts, the Complaint notes.

The Complaint gives more details on the case. It allegedly demands that Zullo, who allegedly told Securities Division investigators that he started pursuing clients in health care facilities as far back as 1987 through investment seminars at Boston hospitals, along with LPL has to repay clients for their losses.

It also calls on LPL to keep an independent investigator and compliance consultant to look into Zullo’s annuity sales and recommend ways to improve the firm’s supervisory process, the Complaint reports.

The Complaint further alleges that Zullo and LPL took in more than $1,825,000 in variable annuity commissions over three years.

From the aforementioned cash, approximately $1,791,000 was derived from commissions on the same product, the Polaris Platinum III (B Shares) variable annuity, the Complaint notes.

Galvin then expounded that most of Zullo’s annuity sales were allegedly from the Polaris Platinum annuities, which come along with a 7% commission.

From the aforementioned commissions, 90% allegedly was supposed to go toward Zullo and 10% for LPL, the Complaint reports.

On multiple occasions, clients allegedly were forced to pay so-called surrender charges after Zullo convinceed them to switch to the Polaris Platinum annuity, the Complaint notes.

Gavin is now seeking to revoke Zullo’s registration as an adviser in Massachusetts and permanently bar him from the securities business in the state, while seeking restitution for those who lost money, the Complaint reports.

What is more, it also asks LPL to keep an independent third-party investigator and compliance consultant to probe Zullo’s annuity sales and recommend ways to improve LPL’s supervisory review process and client complaint resolution procedures, the Complaint notes.

Finally, the Complaint alleges that Zullo‘s “greed for commissions at times led him to disregard the wellbeing of his clients.”

Securities Lawyers Investigating

The Peiffer Wolf Carr & Kane securities lawyers often represent investors who lose money as a result of fraud schemes and are currently investigating Roger Zullo’s alleged fraud scheme. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.

Investors who believe they lost money as a result of Roger Zullo’s alleged fraud scheme may contact the securities lawyers at Peiffer Wolf Carr & Kane, Jason Kane or James Booker, for a free no-obligation evaluation of their recovery options, at (585) 310-5140 or via e-mail at arosca@prwlegal.com or jbooker@prwlegal.com.

In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent blogs regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases.

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